L.E.T.S. C.R.E.-ate a more Cooperative and Community Friendly Economics Oct 20th, 2009
L.E.T.S. C.R.E.-ate a more Cooperative and Community Friendly Economics
Oct. 20th, 2009
The Community Reserve Exchange (C.R.E.) cooperative is a project of Re-Imagining Economics (visit www.economics.arawakcity.org ) that is moving toward establishing a fully functional association. The idea of an exchange cooperative has features that make it more like a community based credit union, than a bank. Banks, as privately held corporations, tend to operate to maximize their commissions and profits as a privately owned business, with a special franchise to produce debt-based money. Imagine instead, a blend of parts of a credit union, a buying club, Craig's List, and Angie's List. At the beginning it will be a version of a basic L.E.T.S. process, also known as a Local Exchange and Trading System. We are now examining accounting related software, and will be adapting different components to build an expandable system, including directory and classified section.
The goals of this exchange cooperative include reducing the need for US dollars, and acting to retain wealth within our community. Economic recessions and depressions are destructive to our communities, largely because most of our money has tended to be debt-based money. When currency is scarce at the community level, people don't have enough currency to do work that needs to be done. At this particular time, the large banks which have been designated as too big to fail are one of the primary causes of the collapse of our economy. The bail-out money which was given to these banks is being used to create paper profit returns on that money, rather than loaning that money into our communities as a basis for putting more currency into circulation. In effect there is a socialist welfare economy for banks, and tough luck, free market economics for everyone else, even though we are the ones who have gone into debt to stabilize the too big to fail and too big to manage mega-banks.
The L.E.T.S. model has been used around the world, and is currently much more popular in Europe than in the US. There is usually a membership agreement which is a binding contract with the association. There will also be an orientation for new members, and an ongoing social and education process for members through the year. The trading system will be password protected, and will allow members to post notices for goods and services that they are looking for, and to post goods and services they want to provide for trade. We will begin with using a Community Reserve Note (CRN) system which will be our alternative to the US Federal Reserve Notes, also known as U. S. dollars. At the beginning we will establish an equivalence which may change over time. The C.R. notes will initially be a unit of accounting, and will be used to represent the value of labor and other commodities being exchanged. Statements of account balances will be sent out via email for free, or as a paper copy by US mail for an additional fee. There will be an annual subscription fee, and fees for special services.
If currency was managed in the interest of our communities, it would be better understood as a legal institution that is used to facilitate exchange. Treating currency as if it were a commodity provides a structural prejudice to privatized banking, to control who has access to money as capital, and who does not. The CRE cooperative is one model for creating a sovereign exchange association which can regulate its own micro-economy, perhaps in cooperation with other similar associations.
This CRE cooperative has the potential for expansion and diversification, including allocating some resources toward building the community, a 100% reserve revolving loan fund, and a buying club through which members could buy from certain suppliers at near wholesale prices. We may also connect with a utility such as PayPal, so that we can accept cash payments and make cash payments by way of the internet, when US dollars are involved with member exchanges.
We intend to fully follow the the established principles of cooperation, which includes open membership, democratic member control, membership capital and limited patronage rebates, that the organization will perform in a autonomous and independent manner, and that we will support, in principle, cooperation with other cooperatives.